EarthLink to Philly: Run your own WiFi or we?ll shut it down

Philadelphia's municipal WiFi project, one of the oldest and most ambitious in …

EarthLink is done dealing with Philadelphia's municipal WiFi, and has given the city an ultimatum to take the system off its hands or else it will pull the plug. If the network gets shut down, it will mark the end of one of the largest municipal WiFi projects in the US, and another indication that the vision of municipal WiFi from just a couple of years ago is swirling around the toilet bowl.

Anonymous sources close to the discussions told the Philly Metro that EarthlLnk has given the city of Philadelphia until tomorrow to take over the WiFi project. If the city fails to come up with a plan, the company apparently plans to begin shutting the network down. EarthLink reportedly stopped accepting new customers last week in anticipation of its original deadline of last Wednesday, which came and went with no resolution.

EarthLink decided last November, after having launched a number of municipal WiFi projects with little to no cash up front, that there was no money to be made in the business. After doing a thorough review of the company's wireless business, EarthLink figured out that there are massive losses involved in launching these networks due to unexpectedly high deployment costs and unexpectedly low usage by city residents.

In February of this year, EarthLink officially announced that it was exiting the municipal WiFi business and hung a "for sale" sign in the window. "It quickly became evident [after starting the review of its business] that we would have a really difficult time changing the perception by some of the cities that we owed them a free network rather than the city stepping up to make the business model viable for both them and for our shareholders," EarthLink CEO Rolla Huff said at the time.

Philadelphia's network is certainly not the first to experience problems, although most other city-backed networks have run aground far before network buildout even begins. San Francisco's highly-anticipated municipal WiFi network has been stuck in neutral since 2005 after the city attempted to change some of its contract terms with EarthLink. And, last August, Chicago finally ditched its plans to launch a municipal WiFi network after it butted heads with EarthLink and AT&T over cash payouts for the city to actually use the network itself as an anchor tenant.

Only a very few municipal WiFi networks appear to be even remotely successful, like the one in Corpus Christi, Texas. Originally a mesh network for use by city workers to transmit data (exactly what Chicago didn't want to do). Corpus Christi now has a 55-square-mile network that is heavily used by the city government while offering access to residents for as little as $6.95 per month.

Philadelphia has been working to save its network without dipping into taxpayer funds ever since EarthLink announced its plans to get out of the WiFi business, but has yet to reach any sort of solution. "We have been participating in discussions about what options and opportunities may exist," a spokesperson for the mayor, Douglas Oliver, told the Philly Metro. "We paid a lot of attention to this and explored several different options but they have proven to be fruitless."